EPA Announces Expected Changes to the Grant Allocation Formula for Awarding Grants Under the BEACH Act

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EPA is announcing potential changes to the grant allocation formula it uses to award implementation grants under the Beaches Environmental Assessment and Coastal Health (BEACH) Act. EPA expects any changes to the formula would become effective in 2010.

Background

Each swimming season, state and local health and environmental protection agencies monitor the quality of water at the Nation's beaches. When bacteria levels in the water are too high, these agencies notify the public by posting beach warnings or closing the beach.

To improve water quality testing at the beach and to help beach managers better inform the public when there are water quality problems, Congress passed the Beaches Environmental Assessment and Coastal Health Act (BEACH Act) in October 2000. This Act authorizes EPA to award grants to eligible states, tribes, and territories to develop and implement beach water quality monitoring and notification programs at coastal and Great Lakes recreational waters at beaches. These grants also help states develop and implement programs to inform the public about the risk of exposure to disease-causing microorganisms in the waters at the Nation's beaches.

Since 2002, EPA has awarded approximately $70 million for beach monitoring and notification grants to 35 eligible states, tribes, and territories. EPA uses an allocation formula to distribute these grant funds to eligible applicants. EPA consulted with states and the Coastal States Organization in 2002 to develop the allocation formula, which considers three factors:

Why is EPA Considering Revising Its Allocation Formula?

Most of the grant funds (up to $10 million) are allocated based on the minimum dollar amount needed to establish and run a beach program according to the length of beach season. This method underestimates the amount of funds needed by states with short beach seasons but a significant number of beach miles. The current allocation also uses state shoreline length as a surrogate for beach mile length. For a few states this factor overestimates the number of beach miles resulting in larger grant allocations than these states should optimally receive. The Government Accountability Office identified this weakness in their report on the beach program. The current formula also uses coastal county population data provided by the Census Bureau as a surrogate for beach use. This results in a larger grant allocation for states with high coastal populations whether or not beach use in those states is high.

How did EPA Develop its Revised Allocation Formula Recommendations?

EPA first made public its intention to revisit the allocation formula in the Federal Register notice announcing the availability of fiscal year 2006 grants(71 FR 1744, 1746; January 11, 2006). On February 15, 2006, EPA convened a workgroup of EPA and state representatives to discuss possible changes to the allocation formula. Twenty-five of the thirty-five BEACH Act states participated in the workgroup and carefully evaluated alternatives to the three existing allocation formula components (beach season length, beach miles and beach use). The workgroup continued its work through May 2007.

What Changes is EPA Considering?

EPA is considering three changes to its current BEACH Act implementation grant allocation formula, which would become effective in 2010:

EPA is considering making shoreline miles and coastal county population permanent factors in the allocation formula for the first $10 million of annual BEACH Act grant funds;

EPA is considering including a financial incentive component as part of the allocation formula to encourage states to spend their grant funds as efficiently and quickly as possible, consistent with sound financial management, and;

EPA is considering redistributing underutilized funds using a new allocation formula that is based on beach miles and beach use alone.

Because in most cases, shoreline miles and coastal county population do not dramatically fluctuate, funding based on these factors is relatively stable. States and territories rely on these factors to provide them a generally consistent level of funding for their beach monitoring and notification programs. For many states, funds for recreational water monitoring are limited to the amount received from BEACH Act grants. States are extremely sensitive to the prospect of any reductions in their grant amounts; some states have indicated to EPA that they might choose to opt out of EPA's BEACH Act grant program if their grant amounts are reduced. For these reasons, EPA is considering making shoreline miles and coastal county population permanent factors in the allocation formula for the current $10 million appropriations.

In addition, EPA is considering a review of state and territory spending every October and reducing the following year's grant awards to specific states and territories that have uninvoiced funds more than three years old. EPA would identify these uninvoiced amounts and compare them to the amount EPA expects to award that fiscal year. EPA would then reduce the grant amount for those states and territories with remaining three year-old funds by the amount remaining. Focusing only on funds that are more than three years old ensures that grant funds are being used efficiently while allowing for differences in state accounting practices.

After reducing new grant awards to states and territories with remaining three year-old funds, EPA is considering redistributing to those states and territories that do not have uninvoiced funds older than three years the remainder of new grant funds, according to an additional allocation formula. EPA expects that this additional formula will be composed of two factors:

beach miles, and

beach use

Unlike the current allocation formula that uses surrogates for the two factors, EPA intends to use actual values for beach miles and beach use for this additional formula. With the help of state beach program managers, EPA is compiling and quality testing beach mile information for all the BEACH Act states and territories, and expects to have reliable data on the extent of beaches by mid-2009. EPA is also working with the National Oceanic and Atmospheric Administration (NOAA) to expand their research on beach use to Great Lakes states. EPA is also looking for information on beach use in the territories.

Historically, the BEACH Act grant program has been funded at approximately $10 million annually. If in the future the program receives funding over $10 million, EPA intends to apply the additional allocation formula to any funds over $10 million.

What Problem Does Under-Utilization of Funds Cause?

EPA is concerned that the failure of states and territories to use their available funds quickly and efficiently may mean their beach programs do not need the funds they are awarded through the current allocation formula. As a result, the beachgoing public in other states has less information available to it to help make informed decisions about swimming at their beaches, which may be helped by more grant funds. In order to provide the most public health benefit to the largest population of beachgoers across the country, EPA needs to ensure that grant funds are being quickly used efficiently and appropriately.

How Would This Change Affect Current State Funding?

Based on grant fund use as of 2008, EPA expects that most states and territories will not be affected in 2010 because they currently have no unused BEACH Act grant funds that are more than three years old. The expected changes to the allocation formula will affect only those grantees that have unspent BEACH Act grant funds that are more than three years old. Under the process EPA is considering, should any state, tribe, or territory in 2010 have uninvoiced funds from 2001 through 2007, EPA would reduce their 2010 grant funding by the amount equal to this older money and redistribute these funds to the other grantees.

How Will EPA Incorporate State Considerations in the Implementation of these Changes?

EPA intends to reconstitute the workgroup of EPA and state representative to discuss the details for implementing this change to the allocation formula. EPA will also invite territorial representatives to the workgroup.